Advanced Micro Devices is in the middle of one of its best runs in recent memory.
During the past year, the company — known for gaming-focused computer processors — has rebounded from a low period and gained ground on its much larger foe Intel. AMD’s new series of computer chips has pushed the company to multiple positive earning reports, the latest coming on April 25, when AMD posted a 40 percent increase in year-over-year revenue.
Since then, AMD’s stock has risen by more than 10 percent, eclipsing $11 per share as of mid-morning trading Friday.
The jump in share prices shows that investors are confident that AMD’s upward trajectory will continue, said industry analyst Rob Enderle of Oregon-based Enderle Group. AMD’s star has risen as Intel has endured a rough stretch, heightened by January revelations of major security flaws in some of its hardware.
“It’s a combination of (AMD) being able to execute while Intel is running into severe issues and is really struggling at the moment,” Enderle said. “So AMD has come out of it and is becoming the company to beat at the moment because they are so focused.”
Intel continues to be a much larger company than AMD — Intel’s market cap is about $241.25 billion, compared to AMD’s $10.55 billion cap. Still, AMD has been able to capitalize on its competitor’s issues.
About a year ago, AMD released its much-anticipated “Ryzen” processor line, chips that were built under the company’s new Zen architecture. The chips received positive analyst reviews.
AMD followed that with another successful release on April 19 of its second generation of Ryzen chips, which Enderle said “exceeded expectations,” and which experts have lauded because the chips have offered similar performance to Intel’s version of processors but for a cheaper price, ranging from $199 to $329.
The recent positive vibes are a welcome change for AMD after years of shaky performances and stagnant stock that from 2012 to 2016 at times fell below $2 per share.
AMD got a significant boost in January after researchers from Google’s Project Zero team revealed processor flaws mostly affecting computer chips made by Intel. The flaws, named Spectre and Meltdown, made it possible for hackers to steal personal information, such as passwords, from most modern computers.
Intel also faced criticism after revelations that the company told customers, including Chinese technology firms, about the flaws before it notified the U.S. government. Additionally, Intel in April said it could not mitigate all of the flaws’ variations, meaning that some computers carrying Intel chips will always carry some type of threat.
Also in April, media outlets reported that Apple is planning to build its own chips for Mac computers as early as 2020, replacing Intel chips the computers have carried.
“You have one of those tortoise (catching up to ) hare moments going on now” Enderle said of AMD’s competitiveness with Intel, which, despite its issues, still managed to report a 13 percent year-over-year growth in first quarter revenue.
AMD’s year has been good, but it has not been perfect.
The company months ago confirmed that the Spectre flaw affected some of its processors and has since issued patches to address the flaw.
AMD was also at the center of security accusations made in March by an Israel-based firm, CTS Labs. The research group published a white paper that alleged additional flaws in AMD processors could put the company “at significantly increased risk of cyber-attacks.”
While industry experts and AMD said the concerns were overblown and that the level of threat was low, the white paper initially dropped AMD’s stock by about 2.5 percent.
Some analysts have also warned that AMD’s stock could be at a premium because it’s been rising for so long. Since the start of 2016, the stock has ballooned by more than 250 percent. The stock, however, is nowhere near its peak in 2000, when price per share hovered around $40 that summer.
AMD is projecting $1.7 billion in revenue for the current quarter, which would be roughly $480 million more than the same quarter in 2017.
In a recent call with investors, CEO Lisa Su said her company expects to continue turning positive results and does not see a slowdown coming.
“We are confident that we have the right long-term strategy to delivery sustained revenue and profitability growth,” Su said. “We will continue to make significant investments in hardware and software to deliver an even more compelling roadmap for our customers in 2019 and beyond.”